A SCHEME designed to help people deal with debts will be improved, the Scottish Government has said.

Ministers want to change protected trust deeds (PTDs) based on the results of a consultation on how to balance the needs of debtors with the rights of creditors.

PTDs are voluntary agreements where a debtor offers to put what assets they can towards paying as much of their debts as possible for a fixed term.

When accepted by creditors, the deed becomes protected, interest on the debt is frozen and the debt cannot be pursued further through legal action.

PTDs are seen as a less severe form of insolvency and can be used to stave off bankruptcy, technically known as sequestration in Scotland, if the debtor complies with all of the terms.

Fergus Ewing, the minister with responsibility for personal debt and insolvency, said: "The Scottish Government understands that by enhancing the protected trust deed process to ensure that it effectively balances the needs of indebted individuals and their creditors, it will not only assist in the financial rehabilitation of individuals but will also help strengthen Scotland's growing economy."

New guidance and a revised structure for trustee fees are being proposed. A review board will be introduced and a number of technical changes to the system will be brought forward.

The consultation ran from October 17 last year to January 31.

The number of struggling debtors using the scheme is increasing, according to figures published last month.

A total of 2,247 PTDs were awarded between January and April, up 10% on the previous quarter and up 43per cent on the corresponding quarter of last year.